In the case of Apple iPhones, the returned phones are stripped down, the
battery is replaced, the phones are checked for proper operation, if
there is the slightest mark on the glass screen or case, they are
replaced. If the logic board is bad, it is trashed. The phones are
resold as "refurbs." with a full new phone warranty and eligibility for
a two year AppleCare policy.
The phone I turned in lived in an Otterbox Defender case, so there
wasn't even a fingerprint on the screen or case. If the power switch is
replaceable, that's what will happen, and Apple will stick in a new
battery and resell the phone because other than the switch, it was perfect.